Hmm..i never say any article mentioning the DJIA's circuit breaker. I thought it did not exist in the first place. Looks like I am dead wrong. Certainly it does not exists for individual stocks..I have seen Bear Stern and Lehman Brothers share prices dropping dead like flies (losing like ~70% of its value in a single day) but trading was not halted. I could be wrong here..Looks like i need to do some GOOGLING on this.

Well the appearance of this article might mean that the DJIA has hit a temporary bottom in a contrarian point of view.

Though investors have endured some pretty terrible Dow performances in recent weeks, including another 300-plus point drop yesterday, the downward spiral has not gone far enough to halt trading on Wall Street.

New York Stock Exchange rules currently call for circuit breakers to interrupt trading only in cases of extreme drops of more than 1,100 points. Such breaks, established after the Black Monday crash in 1987, are intended to help investors step back and assess what is happening.

The thresholds for market timeouts are set quarterly, using the Dow's average closing price for the previous month, and activate in increments of 10, 20, and 30 percentage point drops.

For the current fourth quarter, if the Dow drops 1,100 points before 2 p.m., trading stops for an hour. If such a drop happens between 2 p.m. and 2:30 p.m., trading halts for a half hour. After 2:30 p.m., the 1,100-point threshold expires.

There is also a 2,200-point mark. If the Dow falls by that much before 1 p.m., trading stops for two hours. Between 1 p.m. and 2 p.m., a 2,200-drop causes an hour halt. After 2 p.m., trading ends.

If the Dow falls by 3,350 points, trading stops for the rest of the day.

The circuit breakers have been activated twice, both times in late afternoon trading on Oct. 27, 1997, when the Dow eventually closed off 554 points, or 7.2 percent. Trading that day was halted under previous triggers, which were later revised in 1998. The current triggers have never been hit.

If the president approves, the Securities and Exchange Commission can suspend trading for up to 90 days. It has never used that authority. However, the NYSE elected to close on several occasions after national tragedies, including the Sept. 11, 2001, terrorist attacks and presidential assassinations.

The prospect of a halt to trading seemed possible yesterday morning after Dow, Nasdaq and S&P 500 futures contracts declined 5 percent, meeting a threshold set in May 2001 and triggering a suspension in futures markets. It was the first time that the "down limit" had been reached since the 5 percent mark was set in May 2001, according to Mary Haffenberg, a spokeswoman for the Chicago Mercantile Exchange.

Still, Art Cashin, director of floor operations for UBS Financial Services, said predictions of a temporary shutdown of exchanges were "overly dramatic." While he was perplexed by the stock market's relatively muted response to the meltdown in the futures market -- and disappointed not to get a sharper drop that might indicate a market bottom -- he wasn't sorry to see the market's circuit breakers go unused.

"The circuit breakers they put in aren't as productive as people would think," Cashin said. When the market heads toward levels that would trigger a halt in trading, investors can sense that they have a limited time to bail out of positions and will start selling in a panic, virtually guaranteeing that the circuit breaker gets tripped. "It sometimes becomes a self-fulfilling prophecy," he said.

That kind of snowball effect can offset a circuit breaker's usefulness as a tool for cooling off.

Even so, for some investors, triggering the circuit breakers could mark a bottom to the market. Every day they go unused is another day for traders, like healthy people wondering when they'll catch a flu bug that's going around, to worry whether the worst is yet to come.

"Traders down here were hoping for a much stronger capitulation," said Ben Willis, an NYSE floor broker for institutional brokerage VDM. Customers are waiting to pounce on buying opportunities and "we're all ready to spend their money," he said.

Total volume in the New York Stock Exchange yesterday was only slightly above the six-month average, and the atmosphere on the floor was calm throughout the trading session, belying the frenzied sell-off overseas and in the futures market.

"Maybe it's like with kids: quiet is bad," said Stephen Wood, senior portfolio strategist at Russell Investments. "But I don't know that I'm a firm believer in the capitulation theory. Do you need to have some huge crescendo to end the opera? I don't know that you do."